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The White House offered a reaction to Wednesday's Congressional Budget Office estimate on the Senate Finance Committee's health care bill --"This is another important step forward for health reform. The analysis confirms that we can provide stability and security for Americans with insurance and affordable options for uninsured Americans without adding a dime to the deficit – and saving money over the long term," said spokesman Reid Cherlin. POLITICO

NYT: The cost analysis is in: the Senate Finance Committee’s health care legislation, as amended during seven days of debate, would cost a projected $829 billion over 10 years, up from $774 billion, according to the Congressional Budget Office. And it would reduce the future federal deficit by $81 billion, up from an earlier projected deficit reduction of $49 billion.

WaPo: A health-care reform bill drafted by the Senate Finance Committee would cost $829 billion over the next decade and would meet President Obama's goal of reducing the federal budget deficit by 2019, the nonpartisan Congressional Budget Office said Wednesday.

"According to CBO and JCT’s assessment, enacting the Chairman’s mark, as amended, would result in a net reduction in federal budget deficits of $81 billion over the 2010–2019 period. The estimate includes a projected net cost of $518 billion over 10 years for the proposed expansions in insurance coverage. That net cost itself reflects a gross total of $829 billion in credits and subsidies provided through the exchanges, increased net outlays for Medicaid and the Children’s Health Insurance Program (CHIP), and tax credits for small employers; those costs are partly offset by $201 billion in revenues from the excise tax on high-premium insurance plans and $110 billion in net savings from other sources. The net cost of the coverage expansions would be more than offset by the combination of other spending changes that CBO estimates would save $404 billion over the 10 years and other provisions that JCT and CBO estimate would increase federal revenues by $196 billion over the same period. In subsequent years, the collective effect of those provisions would probably be continued reductions in federal budget deficits. Those estimates are all subject to substantial uncertainty."

I was glad to see James Pinkerton engage my criticism of Louisiana Gov. Bobby Jindal’s (R) endorsement of federal price controls for health insurance. (Click here to see Jindal’s response.) I was even more pleased to see that Pinkerton has his own blog devoted to developing a Serious Medicine Strategy.

If I understand Pinkerton, his argument is essentially: it’s all well and good for some unelectable wonk in the “citadel of libertarian thinking” to “uphold ivory-tower free-market purity” by opposing price controls. But Republicans need “art-of-the-possible solutions” to win elections, and 90 percent of the public support those price controls. “Everyone has a right to his or her principled position,” Pinkerton writes, “but the majority has rights, too.”

Two problems.

First, Pinkerton suggests that libertarians oppose price controls for reasons that only matter to libertarians, and therefore they may be safely ignored. Problem is, price controls hurt people. Were Pinkerton to explore the merits of Jindal’s proposal, he would soon conclude that imposing price controls on health insurance taxes the healthy, reduces everyone’s health insurance choices, and creates even greater incentives for insurers to shortchange the sick. (Turns out that what Larry Summers said about price controls applies to health insurance, too.) As John Cochrane explains, those price controls also block innovative products that would provide more financial security and better medical care to the sick.

But Pinkerton’s advice for Republicans is, essentially: “Do what’s popular now, even if it hurts people and voters end up blaming Republicans for it later.” How is that a good strategy?

Second is this idea that “the majority has rights.” Majorities don’t have rights. Individuals have rights. For example, you have the right to negotiate the terms of your health insurance contract with the individuals at this or that insurance company. Majorities may attain power, but that’s the opposite of rights. (See the Bill of Rights.)

Finally, a couple of important odds and ends. Pinkerton suggests it is “un-libertarian” to be “pro-life,” or to “support the police, the military, and other upholders of public order,” or to “support government restrictions on…euthanasia.” Writing from the “citadel of libertarian thinking,” I can assure him he is wrong. Might I suggest Pinkerton read the relevant chapters from The Encyclopedia of Libertarianism? (The health care chapter is a page-turner!) Also, I did not “denounce Jindal” any more than Pinkerton denounced me. I criticized his ideas, and I respect the man.

(With Elizabeth Dupre) * The controversy over aspects of the House health care legislation that have been inappropriately equated with “death panels” has obscured the real problems with these provisions. While equating these proposals with death panels is a careless exaggeration, the legislative language about end-of-life counseling is disturbing because of the intrusion it represents into patients’ discretion and the way doctors practice medicine. The provisions are needlessly prescriptive, and they invite the government into private and complex health matters. Proponents believe these policies can save substantial money, but this will not occur. Congress can fix the problem by simplifying the legislation and making the principal goal ensuring patients’ autonomy and providing high-quality care at the end of life.

Speaking before a joint session of Congress on September 9, President Barack Obama said the emotional charges that his health reform calls for the creation of “death panels” are “bogus claims” that are “cynical and irresponsible. It is a lie, plain and simple.”

The assertion is that Obama’s health care proposals, embodied in House bill HR 3200,2 create government-sponsored committees to decide which patients are not appropriate candidates for life-saving but expensive medical treatments.3 The charges stem from a Medicare provision sponsored by Representative Earl Blumenauer (D-Ore.) that would pay doctors for voluntary counseling sessions that address end-of-life issues.4 The indictments are indeed false, but they have nonetheless framed the debate around the end-of-life provisions, obscuring the real problems with proposals actually included in the legislation.

This provision, under “Advance Care Planning Consultation” in Section 1233 of HR 3200, is highly prescriptive, outlining in pedantic legislative language what end-of-life issues doctors should “advocate” with patients, the specific medical advice they should offer, and even the sort of clinical circumstances (chronic illness, transfer to a nursing home, cancer diagnosis, severe injury) that should serve as a trigger for these discussions. Critics of similar state-level legislation on end-of-life care (on which HR 3200 is loosely modeled)5 argue that the way these provisions are structured requires doctors to offer “death as a valid medical option.”6 This is an emotional charge that only reinforces why these sensitive matters are best left to private discussions between patients and doctors without federal guidance.

The provisions themselves impose burdens on providers that obviate what should be the principal purpose: encouraging physicians to raise end-of-life issues with patients in order to promote patients’ autonomy and make sure medical care at the end of life reflects their individual preferences. The language of HR 3200 is too prescriptive, and it introduces federal rules to govern the details of how these discussions should occur in the privacy of routine clinical practice. In this respect, these provisions magnify larger concerns many people have about current health reform efforts—namely, that present proposals are built on a foundation of greater government control of, and intrusion into, people’s medical care.7

The Basis for Concern

Critics are viewing the end-of-life provisions through the prism of Obama’s call to “bend the cost curve” in health care and decrease overall medical spending. Deconstructing the genesis for the “lies” that the president spoke of starts with understanding how end-of-life provisions actually fit into the administration’s vision for reforming health care in the first place, and how they do not.

The central economic feature of the administration’s proposal is the premise that greater government responsibility for the provision and payment of health care will give federal agencies the leverage they need to eliminate “wasteful” tests and procedures. This thesis turns on a controversial premise that Americans receive only 55 percent of recommended care, and much of it—up to one-third—is unnecessary, even harmful. To arrive at this estimate, the administration relies on data from Medicare and studies from Dartmouth University that show wide variations in the costs of medical care in different regions of the United States, even for treatment of the same conditions.8 They also demonstrate that regions that spend more on medical services do not necessarily have better health outcomes.9 If these findings are true, some claim that differences between low- and high-spending areas must represent dollars wasted.

So the Obama team argues that bringing the highest-spending areas in line with the lowest-spending areas would save about 30 percent, or $700 billion, each year by eliminating “waste.”10 The specific proposals the Obama team and HR 3200 offer to try to eliminate this waste, however, are limited to proposals that increase spending on health care information technology and comparative effectiveness research (CER) or that create an independent Medicare commission empowered to make binding cuts to the program. Whatever their individual merit, these proposals are little more than window dressing, and they will not wring any meaningful cost savings out of Medicare or health care generally. There is a reason the Congressional Budget Office (CBO) cannot attach a consequential score to any of these policy proposals and why CBO director Douglas Elmendorf said the House health care legislation would increase, not reduce, the government’s long-term health costs.11 Proposals for more investment in health care information tools, or for spending on CER, all have broad appeal largely because they are politically safe ideas, not because they are particularly effective. These initiatives neither cut existing benefits nor threaten entrenched interests.

Because the administration’s cost-saving provisions are highly debatable, reasonable observers looking in on this incongruity argue that wringing savings out of Medicare and bending the cost curve will inevitably require the government to turn to the historic tools government health programs (principally Medicare) use to cut spending—coverage and coding decisions designed to constrain the use of certain high-cost technologies and procedures and price controls implemented through government schedules that are gradually tightened.12

R. Glenn Hubbard put it succinctly in a recent article in the New York Times. Obama’s proposals for universal coverage and government insurance options are directly at odds with his emphasis on cost containment. A public option that reduces costs through public subsidies simply shifts the expense to taxpayers while increasing the share of health care the government would pay for with taxes.13 It further concentrates power and health care decision making in the hands of Washington politicians and federal agencies without addressing the real causes behind inefficient consumption or delivery of care.

Confronted with the charge that programs like Medicare will inevitably be forced to ration access to products and services using their coverage and coding process, Obama officials point to the decisions private insurers make daily to defend the idea of government agencies making these same choices. But big government health care programs like Medicare are not ordinary payers. Medicare’s sheer size and its government imprimatur often mean that its rulings drive decisions made across the entire health care market. Moreover, when a private insurer chooses not to cover a specific service, patients presumably understood the service fell under a non-covered category when they chose that particular insurance plan. Patients also retain some latitude to appeal these decisions or change insurers. No such option exists with a government program. The Medicare appeals mechanism is virtually impenetrable to patients. Formal appeals to Medicare took patients an average of twenty-one months, according to a 2001 report from the U.S. Government Accountability Office. Delays in administrative processing due to “inefficiencies and incompatibility of their data systems” accounted for 70 percent of the time spent processing appeals.14 Nor do patients have the ability to switch out of a government program like Medicare—they are locked in.

The nexus between the concerns that Medicare will be compelled to make more rationing decisions as a method of addressing costs and the origin of congressional interest in tackling end-of-life issues has stoked fears about how these provisions will affect American medical care. These worries fuel the hyperbole Obama soundly rejected September 9. But the administration bears responsibility for emphasizing the tie between end-of-life care and Medicare’s rising costs. The end-of-life provisions in HR 3200 were not a hasty, eleventh-hour endeavor, but the product of a longstanding political preoccupation over the costs to Medicare of caring for patients with terminal illness. Fully 25 percent of Medicare’s budget is spent on beneficiaries during their last year of life, and 40 percent of that is spent in the last month of life.15 These are statistics that have found their way into countless commentaries on Medicare’s high costs as well as statements made by health advisers close to the president.16

Obama has also talked about the economic impact of high-cost care at the end of life. He has referenced the hip replacement that his grandmother received while she was terminally ill with cancer as an example of spending near the end of life that may not be well directed or efficient. He has publicly wondered whether the country can afford those kinds of bills, even though he said he would have paid for his grandmother’s hip replacement out of his own pocket.17 Moreover, the connection between cost control and the end-of-life provisions is fueled by the rhetoric of the architects of HR 3200 themselves and arguments that beneficiaries would opt to forgo expensive and sometimes extraordinary care if they had the opportunity to stipulate these things in advance of a serious illness.18 This may be so, although it is worth noting that studies cast doubt on whether wider adoption of advance directives would really produce any meaningful savings in the first place.19

In summary, the accusations that HR 3200 contains provisions to create money-saving death panels are factually incorrect and deliberately provocative. But the truth remains that the end-of-life provisions actually contained in HR 3200 are borne of a faulty economic premise that such measures can extract significant savings from end-of-life care. The critics of HR 3200 did not establish the link between the potential for cost savings and the end-of-life provisions in HR 3200; proponents of these provisions were the first to make that connection.

Does the Legislation Serve Its Purpose?

Even if wider adoption of advance directives would lead to significant savings—a debatable proposition—a fundamental question is whether provisions in HR 3200 would lead to wider adoption of end-of-life provisions. The balance of this essay will answer this question.

First, the actual text of HR 3200 is so prescriptive, and, at times, so out of sync with clinical routine, that it may actually discourage doctors and patients from considering the kinds of end-of-life services it seeks to promote. Second, the provisions ignore avenues currently available under Medicare to compensate doctors for end-of-life counseling. Moreover, there is nothing in the bill to suggest doctors would be paid more for these services under HR 3200 than they are currently paid under the existing Medicare billing codes. Finally, the provisions in HR 3200 supersede state, local, and private efforts that already exist to encourage physicians to address end-of-life issues with patients.

The end-of-life provisions in HR 3200 are intended to give physicians a way to bill for providing patients with outpatient counseling on end-of-life planning. This includes things such as adoption of living wills and advance directives, in which patients stipulate the types of treatments they would like to have or forgo should they become critically ill and incapacitated.20 By enabling doctors to bill Medicare for providing this counseling, one policy goal behind the provisions is to encourage more physicians to address these issues during office visits.

On the surface, the advance-care planning provisions broadly mirror smoking-cessation provisions that the Bush administration implemented in March 2005 when Medicare Part B coverage was expanded to include smoking- and tobacco-cessation counseling.21 Both the end-of-life and smoking-cessation measures are aimed at providing physicians with a way to bill, and receive reimbursement, for providing prespecified counseling to patients. It is worth comparing the architecture of these two different measures.

The smoking-cessation provisions include requirements doctors must meet to qualify for reimbursement, but these conditions are far less prescriptive and intrusive than the constraints associated with the end-of-life provisions. For example, the smoking-cessation provisions specify the length of time that would have to be spent counseling patients in order for doctors to be able to bill under the new Medicare codes.22 The provisions also stipulate that doctors have to be qualified to provide the counseling, and patients have to have the cognitive capacity to receive the counseling.

The smoking-cessation decision, even at its most prescriptive point, merely states:

Medicare will cover 2 cessation attempts per year. Each attempt may include a maximum of 4 intermediate or intensive sessions, with the total annual benefit covering up to 8 sessions in a 12-month period. The practitioner and patient have flexibility to choose between intermediate or intensive cessation strategies for each attempt. . . . Intermediate and intensive smoking cessation counseling services will be covered for outpatient and hospitalized beneficiaries who are smokers and who qualify as above, as long as those services are furnished by qualified physicians and other Medicare-recognized practitioners.23

The flexible nature of the smoking-cessation provisions stands in stark contrast to the prescriptive terms of the end-of-life provisions contained in HR 3200, even though both measures have the same general purpose: to pay doctors for patient counseling sessions. While the smoking-cessation provisions provide a general framework, the end-of-life provisions provide detailed specifications on when, where, and how the prescribed counseling should occur. Among other conditions, HR 3200 stipulates in Section 1233 that end-of-life counseling should include:

1. “An explanation by the practitioner” of the full range of end-of-life options, and specifically, “advance directives, including living wills and durable powers of attorney, and their uses.”

2. Counseling to the patient on the “benefits” as well as “the role and responsibilities of a health care proxy.”

3. The provision by the practitioner of a list of “national and state-specific resources to assist consumers and their families” with advance-care planning, including the “national toll-free hotline, the advance-care planning clearinghouses, and State legal service organizations.”

4. “[A]n explanation . . . of the continuum of end-of-life services,” a requirement for practitioners. This gauzy and broad statement, at a minimum, is meant to include “supports available” that comprise “palliative care and hospice, and benefits for such services and supports that are available under this title” according to the bill’s text.

The legislation goes beyond merely mandating what specific information should be provided to patients. The statutory language actually requires, in one section, that physicians present certain of these options as being in the patient’s clear interest, stating that an “explanation of orders regarding life sustaining treatment or similar orders . . . shall include: the reasons why the development of such an order is beneficial to the individual and the individual’s family and the reasons why such an order should be updated periodically as the health of the individual changes.”24

The legislation describes no fewer than four broad medical conditions that should serve as a trigger for end-of-life planning. To wit, the advance-care planning provision states that a consultation may be conducted more frequently than once every five years “if there is a significant change in the health condition of the individual, including diagnosis of a chronic, progressive, life-limiting disease, a life-threatening or terminal diagnosis or life-threatening injury, or upon admission to a skilled nursing facility, a long-term care facility (as defined by the Secretary), or a hospice program.”25 It follows that the congressional drafters saw conditions such as diagnosis of a “chronic, progressive, life-limiting disease”—a definition so broad it could encompass almost any chronic illness—as heralding onset of the end of life and triggering the need for consideration of living wills and similar measures.

HR 3200 also sets forth the specific medical interventions that doctors should ask their patients to weigh when deciding what treatments they would want to demand or forgo in an advance directive or living will. Some of these treatments are the core components of end-of-life planning, such as whether patients would want intubation should they become critically ill, cardiopulmonary resuscitation, or prolonged artificial nutrition.

Other treatments doctors are asked to consider in the legislation seem oddly out of place.26 For example, the “indicated levels of treatment” that the legislation says patients should address in their advance directives include some of the core components of care that are typically addressed in advance directives, such as “the intensity of medical intervention if the patient is pulseless, apneic, or has serious cardiac or pulmonary problems” and the “individual’s desire regarding transfer to a hospital or remaining at the current care setting.” But it also directs physicians to discuss elements that are not typically considered the core components of basic advance directives, such as “the use of antibiotics.”27 Inclusion of this level of detail reflects a view among some that antibiotics are overused during the terminal stages of illness.28 But is that really a matter for Congress to legislate? If the conduct of end-of-life counseling required this level of awkward specificity and direction to doctors, one would think that the actual provisions would have been left to regulation and guidance from expert agencies rather than being spelled out by Congress in proposed legislation.

Is the Legislation More Harm Than Help?

Beyond the politics of this issue, there are compelling practical and clinical reasons Congress erred in including the “Advance Care Planning Consultation” provision in HR 3200, especially in its current form. Setting aside the political backlash the provision invited, the inclusion of end-of-life measures represents a troubling intrusion into medical practice that is of a piece with current efforts for health reform. Moreover, the provisions are wholly unnecessary, supersede state and local efforts, and may actually obviate their intended purpose—discouraging rather than promoting discussion of end-of-life issues with patients during private medical encounters.

Doctors Can Receive Compensation for Counseling Now. Doctors currently have vehicles for billing and being reimbursed for this kind of counseling. In the inpatient hospital setting, doctors can bill under a Medicare code for “extended face time” when they provide detailed end-of-life planning, including implementation of advance directives. On the outpatient side, physicians presently classify end-of-life planning discussions under a billing code covering counseling. In addition to this consultation billing code, Medicare and other payers have a code for a family meeting to discuss goals of care.29

While there is presently no payment associated with the family meeting code, Medicare could expand the range of services that fall under it and simply attach a payment to the code, precluding the need for the entire provision in HR 3200. Congress could have directed Medicare to begin paying for this code with a single line of legislative text. Another point worth noting: Medicare reimbursement rates are set according to formulas that take into account the intensity of a physician’s work (Medicare typically pays $92.33 for a forty-minute consultation). There is no reason to believe that, under the unique coding provision called for in HR 3200, Medicare would eventually value these kinds of consultations any differently, or that the reimbursement would be more generous than existing rates for similar services.

The Bill’s Provisions Supersede State and Local Efforts. Even if the end-of-life provisions in HR 3200 are intended only to encourage implementation of advance directives, they supersede state and local efforts aimed at addressing these same issues. Regulation of the practice of medicine historically has been left to states and professional groups. In the context of end-of-life planning, the provisions in HR 3200 usurp from state and local efforts the authority to regulate aspects of medical practice.

Under the “Right to Know End of Life Options Act,” California requires physicians and health care organizations to provide “comprehensive information and counseling” on end-of-life care options and their legal framework to terminally ill patients upon request.30 The act states that “[e]very medical school in California is required to include end-of-life care issues in its curriculum” and that “every physician in California is required to complete continuing education courses in end-of-life care.”31

Under New York law, among other end-of-life measures, “hospitals and nursing homes are required to inform patients before admission about advance directives.”32 In Maryland, health care facilities are required to provide patients, on admission, information concerning the rights of the individual to make decisions concerning health care, “including the right to accept or refuse treatment and the right to make an advance directive, including a living will.”33 Most states also have measures that make it easier for patients to create advance directives and appoint health care proxies. Idaho, Maryland, Vermont, and Washington (to name just a few examples) have created “advance directive registries” that “allow people to create and file legally binding advance directives free of charge.”34

Beyond the purview of state decrees, a countless number of alliances involving hospitals, hospices, nurse and physician groups, law firms, foundations, advocacy groups, and even clergy are also promoting advance-care planning through local efforts. The Robert Wood Johnson Foundation, for example, recently awarded $11.25 million to twenty-one multidisciplinary coalitions that seek to improve end-of-life care through practical policies, guidelines, and regulations at the state level.35 Many of these initiatives are already underway or completed and are credited with successfully encouraging wider awareness of end-of-life planning.36 The Foundation for Healthy Communities has partnered with hospitals, physicians, and health plans in New Hampshire to help residents “plan for their health care, talk about their choices and have them respected.” Their efforts have used survey research, medical chart reviews, statewide educational campaigns, and advance directive revisions to enhance the public’s understanding of, and participation in, advance-care planning.

These measures have not escaped the attention of federal agencies. A Department of Health and Human Services report commissioned by Congress to look at ways to promote the adoption of advance directives found that “interventions that used multi-component, longitudinal approaches have tended to be more successful. More intensive and community wide-interventions [sic] that involve collaborative advance-care planning mechanisms have demonstrated more positive effects.”37 These findings appear at odds with the provisions actually included in HR 3200. Congress, it seems, did not follow its own report.

This all begs the following questions: with so many efforts underway in states, inside hospitals, and by the medical and legal profession itself to encourage adoption of advance directives, do Medicare and Congress really need to address this issue? If it is a matter for federal legislation, does Congress need to advance such narrow provisions given all the efforts already underway? Physicians, patients, and patients’ families have become far more attuned to the benefits of addressing end-of-life issues and more comfortable addressing alternatives to intensive treatment at the final stages of death.38 So many Medicare beneficiaries are taking advantage of hospice and home health services at the end of their lives, for example, that Medicare is contemplating a new payment system to cut reimbursement for hospice and home health care providers in order to contain ballooning expenditures.39

Narrow Provisions May Discourage Doctors from Providing Care. The provisions in HR 3200 are so detailed they might actually discourage doctors from billing under the resulting code. Simply put, doctors might be reluctant to provide end-of-life counseling under the language of the new law, fearing that their patients do not meet the detailed criteria Congress has prescribed in legislation. Ambiguity about the criteria established in the legislation for when end-of-life counseling should occur compounds this. It is not clear if these are requirements or merely suggestions. The resulting confusion could leave doctors worried about billing under the resulting codes out of concern that their patients would not meet all of the resulting regulatory criteria. Such fears are not without ample precedent. Earlier studies of end-of-life issues have reported that physicians have sometimes been encouraged not to refer certain patients to hospice care out of “fear that they will be charged with fraud if the referred patients do not die within six months.”40

Can Congress Fix the End-of-Life Measures?

The legislation could have been written to create the same pathway for doctors to be reimbursed for offering counseling, without generating ambiguity about the prescribed counseling or creating new intrusions into private clinical matters. In the final analysis, however, for both political and practical reasons, the provisions should not have been included at all.

If these provisions do go forward, Congress should add legislative language stating that the counseling is entirely voluntary. Physicians should not be compelled to provide counseling, and patients should not have to stipulate whether they receive it. In that way, the corresponding regulations that will be developed by the Centers for Medicare and Medicaid Services will not be able to require counseling. Health care providers could never be pressured to discuss end-of-life planning for cost-reduction purposes that may conflict with their patients’ best interests or their own clinical considerations.

One has to assume congressional drafters who worked on the provision did not intend to require that end-of-life counseling take place or to coerce providers into cajoling their patients to adopt measures like living wills. Under this accommodating view, the current legislation, with its ambiguous intentions, is merely a product of poor drafting. But the plain language of the proposed statute has opened congressional architects of the legislation up to appropriate criticism and doubts about their motives.

The legislation should also explicitly allow patients to refuse counseling and the implementation of an advance directive with no consequence to their coverage. Likewise, physicians should not be penalized if they decide not to offer counseling, if their patients do not accept counseling, or if their patients choose not to pursue advanced planning. Right now, the legislation seems to do the opposite, especially in its requirement that Medicare create quality measures to assess providers according to their implementation of advance directives.

Language in HR 3200, for example, couples quality reporting measures to the end-of-life counseling provisions. It requires Medicare to collect “measures on end-of-life care and advance-care planning that have been adopted or endorsed by a consensus-based organization” for tracking the “quality” of care delivered by providers. “Such measures shall measure both the creation of and adherence to orders for life-sustaining treatment.” These measures create the possibility that—under a scheme in which physician pay is eventually tied to performance measures—providers could be penalized if, for example, they did not hit certain targets with respect to the number of patients they provided counseling to or if they had a large number of patients under their care opting to forgo advance directives.

Finally, congressional drafters could have modeled their provision after the smoking-cessation policy implemented by Medicare and simply directed the Medicare program to create a new billing code for end-of-life counseling. Alternatively, it would have been programmatically easier, and even more obvious, simply to start paying for end-of-life counseling under an expansion of the existing Medicare code that already corresponds to this service.41

Advance directives were developed to ensure patients’ autonomy and to provide high-quality care at the end of life; compassion and dignity—not economics—were justification for their initial use.42 The end-of-life provisions Congress is promoting are born of a more muddled purpose. As currently written, their aim is to generate wider adoption of advance directives rather than to ensure patient preferences are reflected at the end of life. Their motivation notwithstanding, the measures in HR 3200 remain needlessly prescriptive. They invite the federal government into private and complex health matters, needlessly co-opt matters of patient preference, and needlessly subordinate medical discretion to legislative meddling. They are a symptom of the flawed spirit of the entire House bill and are emblematic of what plagues the administration’s approach to health reform.

The bulk of tax hikes in the Baucus health reform bill comes from a 40 percent excise tax on high-value health insurance plans and $92 billion in new fees on health insurance providers and manufacturers of certain medical devices and branded drugs. In testimony before the Senate Finance Committee, officials from the CBO and the Joint Committee on Taxation said that almost all of the Baucus tax increases would be passed on to the middle-class American consumer.

By 2019, 89 percent of the new taxes will be paid by middle-class taxpayers earning less than $200,000 annually, as summarized in the table below using data from the JCT and former CBO Director Douglas Holtz-Eakin:

Total distributional impact of the excise tax on high-value plans and fees on health industry

Dollar amounts in millions

2013

2019

Income Category

Change in Federal Taxes

% Change In Taxes

Cumulative % of Change

Change in Federal Taxes

% Change In Taxes

Cumulative % of Change

Less than 50k

$9,282

28.2%

28.2%

$15,600

21.5%

21.5%

50k to 75k

$6,080

18.4%

46.5%

$13,972

19.3%

40.8%

75k to 100k

$4,901

14.8%

61.4%

$11,752

16.2%

57.0%

100k to 200k

$9,633

29.2%

90.6%

$22,964

31.7%

88.7%

200k and over

$3,109

9.5%

100.0%

$8,192

11.3%

100.0%

Total

$33,007

100.0%

$72,480

100.0%

In remarks as a Presidential candidate in Dover, New Hampshire on September 12, 2008, Barack Obama said: “And I can make a firm pledge: under my plan, no family making less than $250,000 will see their taxes increase, not your income taxes, not your payroll taxes, not your capital gains taxes, not any of your taxes.” If President Obama signs the Baucus health reform bill – or something very close to it – into law, he will be breaking this pledge to middle-class Americans not to raise their taxes “one single dime.”

The HILL: Senate Republicans have no chance of defeating healthcare reform legislation without the support of a number of centrist Democrats, Sen. Chuck Grassley (R-Iowa) said on Wednesday.

Grassley, who is the ranking Republican on the Senate Finance Committee, claimed that Republican opponents of the bill needed to turn centrist Democrats' fears about the legislation into solid "no" votes on cloture in order to stop the bill if and when it reaches the Senate floor.

"If these folks aren't willing to stand and say that they're not going to vote for cloture until such and such changes are made, then I don't think it's going to have much of an impact," Grassley said in a news conference with Iowa reporters.

Roll Call: Senate Finance Chairman Max Baucus (D-Mont.) said Tuesday that he could receive the final Congressional Budget Office cost estimate of his panel’s amended health care reform bill Wednesday, paving the way for a committee vote on the package.

Bloomberg: “CBO has a lot of work to do,” said West Virginia Senator Jay Rockefeller, one of the finance panel’s 13 Democrats. He said the panel’s vote may be delayed for at least a week. Committee Chairman Max Baucus, a Montana Democrat, said he remains “hopeful” the CBO will deliver an estimate tomorrow.

The Louisiana governor urges his fellow Republicans to "join the battle of ideas" on health care. How did his fellow members of the GOP respond?

Bobby Jindal, the 38-year-old Indian-American governor of Louisiana, and a rising star in Republican circles, did a brave thing on Monday morning: He took to the op-ed page of The Washington Post to urge his fellow GOPers to “join the battle of ideas” on health care. That is, Republicans should put forward their own health care plan. And to get that process rolling, he put forth ten ideas of his own.

At Serious Medicine Strategy, I have long held the same opinion: Republicans need to offer a better plan; they need to offer, most of all, hope for victories over diseases that are incapacitating us--and killing us. And so while I wish that Jindal had zeroed in on the essence of medical science, which is the sustained search for better cures, I admire the Louisianan for speaking out.

The conventional wisdom, of course, is that Congressional Republicans are doing exactly the right thing, saying nothing about health care other than “No.” As a wise former Member of Congress told me last summer, “health care is a losing issue for whichever party is in charge.” Which is to say, since the Democrats are in charge, it’s the Democrats’ turn to be ground up in the meat grinder. As Napoleon counseled, “Never interfere with the enemy when he is destroying himself.”

From a purely partisan point of view, there’s much to be said for this approach. The Democrats destroyed themselves with an overly complicated, overly bureaucratic health care plan in 1993-4, and today they are doing the exact same thing again. Indeed, the destroying-est headline of the whole health care debate appeared in Politico last month immediately after Obama’s speech to Congress: “Echoes of Clinton in Obama Speech.” Ouch!

Jindal, himself a former Member of Congress, obviously understands this dynamic. So in his Post op-ed, he is careful to praise Congressional Republicans for opposing Obamacare; that has been the top priority so far this year, he enthuses. Yet then he offers this suggestion: But Republicans must shift gears. Conservatives should seize the mantle of reform and lead. Conservatives either genuinely believe that conservative principles will work to solve real-world problems such as health care or they don't. I believe they will.

The Atlantic’s Chris Good bolsters Jindal’s argument, noting, “Americans think Obama has better ideas on health care than Republicans in Congress: the NY Times/CBS poll showed Obama beating congressional Republicans 52-27 on that question, which probably means the Democratic Party's ‘Party of No’ attack on the GOP is sticking.”

There are worse things, of course, than being the “Party of No.” It’s worse to be the “Party of Big Government and Incompetent Bureaucracy,” and even worse to be the “Party That Wants To Pull The Plug on Granny.” But at the same time, it is not a bad thing to be the “Party of Health Care.” (And it would be even better to be the “Party of Serious Medicine, the Party That Wants To Fight a Real War Against Disease and Death,” but I digress).

In any case, Jindal’s article offers “ten ideas to increase the affordability and quality of health care.” And given his background -- Rhodes Scholar, the youngest-ever president of the University of Louisiana system, assistant secretary of Health and Human Services under Bush 43 before getting elected to Congress and then to the statehouse in Baton Rouge--his “top ten list” merits close attention.

His suggestions fall into various categories. Some are free-market favorites, such as voluntary purchasing pools, portability, and tort reform.

Others are a bit more centrist, such as “reward[ing] healthy lifestyle choices,” which some conservatives, such as Mike Huckabee, are inclined to support, even as others on the right view such rewarding as nanny-statism.

And some of Jindal’s are highly suspect to purists. One such is “permitting” (presumably by changing laws to force the “permitting”) young people to stay on their parents’ health policies.
Another of his proposals is to require insurance companies to issue policies to applicants with pre-existing conditions. For that idea, Jindal is getting slapped around pretty hard on free-market circles.

Of course, the Cato Institute, a citadel of libertarian thinking, can be expected to oppose any and all intrusions into the marketplace. That’s what Cato does. It’s a principled position that merits respect. And if nine in ten Americans support a given position that violates free-market orthodoxy, does that make a difference? Not to Cato.

Everyone has a right to his or her principled position, but the majority has rights, too. In the case of a ban against discrimination based on pre-existing conditions, some 89 percent of Americans support such a provision, according to a Wall Street Journal poll. The Cato Institute, never having to worry about elections, will suffer no harm from upholding a position held by just a smidgen of the population--and can even hold up its minoritarian resolve as a badge of honor--but politicians are in a different category.

And Republican politicians, in particular, have to think about these health care issues, because they will eventually need to say something, stand for something--and push for something. After all, if present trends continue, the GOP is likely to be in charge, again, of the Congress and even the White House. For sure, Republicans will need a health care policy then.

So while it was not surprising to see Cato denounce Jindal, it was a bit surprising to see a conservative publication, The American Spectator, join in the denunciation; within hours of Jindal’s op-ed, Philip Klein, writing for the Spectator, had posted his response, headlined, “Jindal’s Incoherence on Health Care.”

Why the surprise on the Spectator’s attack on Jindal? Because while the libertarian Cato Institute can always be expected to uphold ivory-tower free-market purity--completely abstracted from the chore of actual governance--conservatives, for the most part, have given themselves the task of forging a “governing conservatism.” Libertarian heroes are figures such as Milton Friedman, Friedrich Hayek, and Ayn Rand, none of whom ever ran for office, much less were ever in charge of anything. Indeed, the great value of libertarian thinking is its purity; Cato, for example, provides an enormous service to the country by consistently upholding the “gold standard” of ideological purity.

By contrast, conservatism is a lumpier and more organic philosophy. Conservative heroes include Edmund Burke, Abraham Lincoln, Robert Taft, Barry Goldwater, and Ronald Reagan, all of whom not only won elections, but sought real change through the legislative and political process. Jindal is in that category, a conservative actively involved in governance. And so for conservative intellectuals who wish their side to win elections and then go on to make real policy changes, they might conclude that they need to work with Jindal and others like him, in order to hammer out art-of-the-possible solutions. Or maybe not.

Klein writes of Jindal: “Some of his ideas... would be aimed at creating a free market for health care in this country. Yet several of his other ideas involve more government regulation.” And then he zeroed in on the same issue as Cato’s Cannon:

Jindal’s proposal for mandating coverage for those with pre-existing conditions. As Klein writes, “A more problematic part of Jindal's article is his endorsement of a requirement forcing insurers to cover everybody with pre-existing conditions.”

But whereas Cannon says that Jindal violates libertarianism, Klein couches it differently. He says that Jindal violates conservatism: “Whatever you may say about such a requirement, it's completely inconsistent with conservative principles.” Now let’s pause over Klein’s assertion, that Jindal’s proposal is “completely inconsistent with conservative principles.” Is it really un-conservative? Yes, it’s true that any sort of government mandate is un-libertarian. But here’s a newsflash: The American people are not libertarian. Most conservatives are not libertarian. Most Republicans are not libertarian. Yes, conservatives and Republicans have libertarian impulses, but they are more likely to be moved by instincts toward traditional morality, patriotism, and nationalism.

That’s why conservatives and Republicans tend to support plenty of regulation that is un-libertarian. Most are pro-life, for example, and supportive of other government efforts to bolster family values. Moreover, conservatives and Republicans support the police, the military, and other upholders of public order. Indeed, most conservatives--and virtually all elected Republicans--support at least some form of Social Security, Medicare, public education, pollution controls, and other restrictions on perfect freedom. And in the realm of health care and medicine, most conservatives support government restrictions on stem-cell research, organ trafficking, and euthanasia.

Governing conservatives, such as Jindal, must take this lumpy political and ideological reality into account. Libertarians can be expected to take their shots at Jindal & Co., because the mere act of getting elected can be taken as proof that a man or woman is prepared to make compromises.
For their part, conservative intellectuals and pundits can join in on the anti-Jindal catcalls if they wish to, but one of these days, someone like Jindal is going to end up leading the House or the Senate, or end up sitting in the Oval Office. At which point, he or she will face many challenges which call for prudence and practicality, as well as ideology and vision. One of those challenges will be making sure that everyone gets at least a decent minimum amount of health care coverage.

And of course, if that future conservative leader really wants to be popular and effective, he or she would be seeking cures to the diseases that

Academics say med mal not a cost saver Despite calls for reform from the president and other politicians, a panel of academics said Tuesday morning that curbing medical malpractice suits won’t significantly reduce health care costs.

Fresh off a press conference where the White House handed out white lab coats to Democratic donors who happened to be doctors, to show physician support for Obamcare, we are now seeing a chorus of liberals touting Republican endorsements of Obamacare. George Stephanopoulos could barely contain his excitement, tweeting out “Schwarzenegger Endorses Obama Health Care Effort.” Bill Frist and Tommy Thompson are others that the left claims are now on their side. Except none of this is true.Today on CNBC’s Squawk Box, former Senator Frist said: “I wouldn’t vote for any of them.” In Politico, former Secretary Thompson said “clearly there are issues that remain troublesome and unresolved.” Governor Schwarzenegger has previously said: “It is absolutely unaffordable for states,” and has previously said: “I cannot and will not support federal health care reform proposals that impose billions of dollars in new costs on California each year.”

The statement that Governor Schwarzenegger released today merely said: ““Our principal goals, slowing the growth in costs, enhancing the quality of care delivered, improving the lives of individuals, and helping to ensure a strong economic recovery, are the same goals that the president is trying to achieve. I appreciate his partnership with the states and encourage our colleagues on both sides of the political aisle at the national level to move forward and accomplish these vital goals for the American people.”

So, in other words, he said the same thing the Heritage Foundation has been saying for months, and yet nobody would attempt to say Heritage is endorsing Obamacare. All sides want a lower costs, enhanced care, improved lives and economic recovery. But Obamacare will cut Medicare benefits to seniors, increase costs to consumers, force individuals onto government health care, shift billions in costs onto states which will result in even more tax hikes beyond the federal hikes called for in the Democrats plans, and push able bodied, middle income adults onto Medicaid.

If Congressional Democrats want real endorsements, they should actually write a bill rather than trying to pass a framework with no legislative language. They should not vote against amendments that would post the bill online for 72 hours before a vote. It is impossible to endorse a bill that the American people aren’t even allowed to see, because Congress is either too deceptive or too arrogant.

Amy Walter: Advocates for the public option like to point to polls showing significant support for their position. But relying on voter's current perceptions of a public option is of little use in understanding how health care reform will ultimately be framed.

The long running drama over HHS' investigation into a letter insurer Humana sent to its customers warning that reform could hurt seniors continued Friday when HHS Sec. Kathleen Sebelius defended the investigation and the hotly contested order that Humana cease sending similar letters until the investigation is complete. www.politico.com/livepulse/

Conservatives and Republicans need a better way to talk about cost-containment than the typical anti-comparative-effectiveness-research argument advanced (most recently) by Newt Gingrich in The Economist.

The Economist asked Gingrich to defend the motion:

This house believes that the widespread use of comparative effectiveness reviews and cost/benefit analyses will stifle medical innovation and lead to an unacceptable rationing of health care.

On its face, that motion is absurd and indefensible. Of course comparative-effectiveness reviews and cost-benefit analyses would limit medical innovation and enable rationing. And thank goodness. If we didn’t limit medical innovation or ration medical care, we would spend 100 percent of GDP on medical care and there would be no money left over for shoes and ships and sealing wax, or food, education, and the internet. Another word for “comparative-effectiveness research” or “cost-effectiveness studies” is “information.” Such research produces information that helps people limit medical innovation and ration medical care in the best possible way.

Yet Gingrich took the bait. He pooh-poohs comparative-effectiveness research and even describes it as “dangerous” – at the same time he assumes knowledge that only research can provide (e.g., “smaller groups [of patients] may have responded best to drug X, Y, or Z”).

What Gingrich actually opposes is government rationing. And with good reason: people get hurt when government rations care, because government’s one-size-fits-all rules cannot take patients’ unique physiologies and preferences into account.

The public knows that, and the Left knows that they know it. The Left therefore tries to distract attention from the question “Who decides?”, and instead shifts the debate to the question, “Do we want better information?”

Gingrich and many others have fallen right into that trap. Gingrich should have rejected the above motion as absurd and attacked government rationing head-on. Instead, he portrays information (!) as a dark and sinister force.

If that’s the approach conservatives and Republicans take, then they deserve to lose the health care debate.

As today’s NYT article on coverage versus cost indicates, the President and Congress have greatly complicated their effort to increase health care access by proposing little in the way of cost containment. We already have the most expensive health care system in the world; trying to fit tens of millions more Americans into that system can only make an unaffordable system even less affordable. Other countries have been able to provide universal coverage while spending far less than we do on health care. But they employ the kinds of meaningful cost constraints that we eschew and that have been largely absent from current proposals for reform.

Or to put it another way, we always have rationed health care on the basis of ability to pay. If we try to eliminate that method for rationing care, we need to find an alternative approach. Otherwise, reform will unravel over time. That is the lesson of the Oregon Health Plan. It was supposed to expand access by eliminating coverage for high-cost, low-benefit care. However, it never implemented real limits on coverage and took advantage of a tobacco tax increase and a booming economy to provide greater access to insurance for the poor. When the economy soured, Oregon had to slash its health care budget. Within about a decade, it had the same level of uninsured that it had at the launch of its Health Plan.

In two surprises yesterday, Tommy Thompson (President Bush’s HHS secretary) and unaffiliated New York Mayor Bloomberg both endorsed health reform this year. Bill Frist, M.D. -- book-touring for “A Heart to Serve: The Passion to Bring Health, Hope, and Healing” -- supports the idea (although he backed off flat backing for current language). Mark B. McClellan (Bush’s FDA commissioner and CMS administrator, now at Brookings), has encouraging words, although he still wants to push for improvements on both the cost and revenue sides. “We’ve still got a long way to go, and it could make the legislation better or worse,” McClellan told us. Pfeiffer quote on all this below. Read more

Attitudes toward a new healthcare bill remain largely divided along partisan lines. Democrats solidly favor healthcare legislation, with 66% saying they would advise their member of Congress to vote for it, with just 5% favoring a "no" vote. However, a rather substantial 29% of Democrats do not have an opinion at this point. Republicans are solidly opposed by 65% to 16%, with fewer undecided (19%). Independents are more likely to oppose (43%) than to favor (34%) healthcare legislation at this point. Gallup

...The quiet war Democrats are waging on specialists is astonishing.-WSJ

"If we are to go forward without a public option, it is more important than ever to make sure that we get another part of health reform right: the exchanges, where it is envisioned that small businesses and people without employer-sponsored insurance could shop for policies of their own." Cappy McGarr, NYT op-ed

Pres. Barack Obama and his Democratic allies say they are interested in creating a new “public option” for working-age Americans in order to keep insurance companies “honest.” Their intent, they insist, is not a full government takeover but a “level playing field,” with no regulatory favoritism or taxpayer subsidies. In theory, the best plans, public or private, would win in this kind of competition. Twenty-five years of experience with Medicare contradicts this theory. NRO Online

Hospitals and insurance companies are pushing back against changes to the latest Senate health-care bill that ease the penalties for Americans who don't carry health insurance. WSJ

"The health reform proposal that Congress will shortly consider is shaping up to merit broad, bipartisan support, incorporating Republican ideas and earning deserved support from Republican leaders such as former Senate Majority Leader Bill Frist. The approach has great potential to reduce costs for families, businesses and government at every level over the long term, while extending coverage to many millions of the uninsured and investing in proven, cost-effective public health strategies. This is an approach that Republicans, Democrats and Independents can and should support.”

And the WH public option shuffle continues: Even with today's LAT reporting that Obama's working for a public option, spokesman Gibbs doesn't acknowledge it from the podium. He's still using the "choice and competition" line, signaling that the White House is far from certain that they've got the votes for it locked down. Here's the bob and weave from today's White House briefing...Read more

Bobby Jindal in WaPo: 'A majority of so-called Republican strategists believe that health care is a Democratic issue. They are wrong; health care is an American issue, and the Republican Party has an opportunity to demonstrate that conservative principles work when applied to real-world problems."

The Uninvited Three (WSJ): "We aren't among the doctors invited to a Rose Garden event today to "join the President in pushing for health insurance reform this year and [who] have offered their help and support," as a White House press release put it. It's unfortunate only supporters of the president's plans will be there. Mr. Obama has missed an opportunity to learn more about the real issues facing patients and doctors and to formulate a plan that truly puts patients in control with doctors as trusted advisers."

Barack Obama said, in his Saturday radio address, that another reason we should pass his health care legislation is to combat the recession and reduce unemployment. Ah yes, our President, the expert on fighting recessions and reducing unemployment, now offering further economic advice.

Well, here's a flash: Obamacare, if it were to pass in anything like the form that the President and most Democrats want, would cause a recession in healthcare. A recession within a recession? Not promising for the overall economy!

As the unemployment rate climbs, President Barack Obama is trying to make the case that his health care overhaul would create jobs by making small business startups more affordable.

Evidently the specter of rising unemployment is starting to haunt the Obama administration--as, of course, it should. Despite relentless spinning by the MSM,">9.8 percent unemployment is terrible news. It would appear that Obama's Robert Rubin-ite economic policy isn't working very well--a policy that can be summed up as Bill Clinton-omics, minus the Internet boom. Which is to say, Clinton's policies weren't that good a decade ago, but they coincided with a once-in-a-generation techno-economic efflorescence, which pumped up the US economy during the late 90s. That was good luck for Clinton, but it explains why repeating those same Clintonite policies--and then some--will not produce similar results, absent the Internet boom/bubble.

And that's why the Obamans got the economy so wrong. They thought unemployment would peak at at less than 8 percent if their porky "stimulus" bill passed--they didn't notice that the light had changed. But today, in the real world, without the Internet boom to pick up the slack, unemployment is headed, even the Obamans now admit, to over 10 percent. (And, of course, Robert Rubin, the grand guru of taking credit for Moore's Law when he was Treasury Secretary, proved what he was really made of during the Citigroup debacle.)

And as I wrote for US News back in June, the problem that the Obamans face on healthcare is that they shot their wad, financially, on the Wall Street bailouts early in 2009. So by the time they got around to health care, the well had run dry, at least politically.

OK, so that's a poor platform, track-record-wise, for Obama to speak on the economy.

So how about the latest argument? In his radio talk, the 44th President said he had met people:

"Who've got a good idea and the expertise and determination to build it into a thriving business. But many can't take that leap because they can't afford to lose the health insurance they have at their current job."

OK, that's an argument, albeit not one backed up by much credibility from the speaker. And as Aristotle reminds us, effective rhetoric has three components: ethos, pathos, and logos. That is, respectively, character, emotion, and logic. The Greeks understood that the proponent of an argument can deploy all three rhetorical tools. But of those three, ethos, or character, was the most important. Why? Because in the long run, listeners must trust the person delivering the message. And as we have seen, on the issues of economic stewardship and unemployment, Obama hasn't done much to earn trust.

And so what about healthcare? Obviously I have had plenty to say about healthcare throughout the course of this blog, but here's one revealing Obama quote to focus on, in re: the connection between the healthcare sector of the economy and the overall economy. This is what Obama said about healthcare legislation he could support, in July:

And that's where my bottom lines will remain: Does this bill cover all Americans? Does it drive down costs both in the public sector and the private sector over the long-term?

Note the plural on "bottom lines." He is saying, very specifically, that he wants to "drive down" costs in both the public and the private sector. Which is to say, he wants to shrink both those healthcare sectors--isn't that the same thing as a recession? And of course, the tools to be used to achieve this cost-driving-down are the bluntest and crudest of instruments: rationing and price controls.

But critics of the current healthcare system, the one that Obama inherited--the folks who do the healtcare policy thinking for the administration--all say that America is spending too much on healthcare. Seventeen percent of GDP is too much, they declare. Their assertion has always struck me as more aesthetic than economic, and is therefore suspect, economically. So the rest of us might ask before we lambaste that 17 precent: What's the other 83 percent spent on? Is that other money all well spent? All of us have an opinion on the aesthetics of the overall economy, of course--what is a good spending priority and what is a bad spending priority. But most of us aren't in a position to turn our aesthetic judgments into policy.

And in fact, here at Serious Medicine Strategy, I have plenty of plenty of judgments about the current system: I think that we over-invest in trial lawyers, for example, and that we under-invest in cures. And I am prepared to make my argument--including the argument that over the long run, we can drive healthcare costs down by improving technology, just as we have driven down the price of cell phones and computers and just about everything else.

If the question is how to improve the quality of healthcare, price controls and rationing are not the answer. That's what the American people think, anyway, even if they can't always articulate their thoughts to the satisfaction of policy elites. So now the challenge is for the people to communicate their thinking to those elites.

Yuval Levin critiques the Finance Committee's product in The Weekly Standard and finds it disastrous: "...Tax increases, a new entitlement sure to grow more costly every year, fewer options for doctors and patients, a far greater government role in health care, and the prospect of health care service shortages, disruptions, and rationing."

An op-ed critique of government run healthcare in the Washington Times by a doc.

"Is there anyone left willing to talk about health care reform calmly?" asks pediatrics professor Aaron Carroll in the HuffPost. "...The dialogue has become so partisan and stained that it seems that the only decision anyone needs to make is which team they’re on.

While a strong majority of American voters support reforming the health care system and passing legislation this year, just 41 percent of them support the comprehensive plan proposed by President Obama and the congresssional Democrats. "That’s down two points from a week ago and the lowest level of support yet measured," according to Rasmussen Reports. By a margin of 59 percent to 30 percent, American voters prefer passing a series of smaller health care reforms that address specific problems rather than a comprehensive plan promising universal coverage.

Based on these polls, the Democrats would benefit politically, I think, by passing incremental health care reforms by years end. The hoopla of a Rose Garden signing ceremony would do much to increase the Democrats partisan edge over Republicans among voters.

But it seems that some Democrats want to keep Republicans politically relevant by putting the controversial public option in the conference report, and forcing a final vote in the waning days of Congress. There are many Republicans salivating over that prospect.

Pew Forum: As the political battles over health care reform intensify, religious organizations are forcefully adding their voices to the debate. They have launched media campaigns both for and against the proposals under consideration by the U.S. Congress, appealing to millions of Americans through national radio and television ads, Internet webcasts, conference calls, petitions, prayer vigils and sermons on health care.

Economic Policy Institute: From bad to worse: the proposed excise tax on health benefits Congress wisely abandoned an earlier proposal to cap the current tax exclusion for employer-sponsored health care, which was rife with problems. Now, unfortunately, the Senate Finance Committee is moving toward a different proposal, an excise tax on insurance coverage, which would not only create the same problems as the original proposal – but would add new ones. The new excise tax would not only disproportionately burden workers whose coverage is more expensive because they work in businesses that are smaller or employ more older workers, as the earlier proposal would have done. It would also add a more regressive tax burden to low- and middle-income workers

The Finance Committee bill has gone from bad to awful. Having rejected a public plan, the Committee spent yesterday gutting the individual mandate. I don't know if there is any serious possibility of the Carper proposal being considered by the Senate, but were it adopted, it would hobble any state efforts to adopt a meaningful public plan themselves in the wake of the rejection of national public plan choice.. It is just one more gift to the private insurance industry.

As Congress moves toward the end game in health care reform, the Democrats need to consider the example set by the Republicans when they last found themselves politically in a situation similar to that the Democrats find themselves in now.

In 1995 Newt Gingrich’s "contract with America" Republican majority, holding decisive control of Congress, rammed through the House its own "The Medicare Preservation Act," intended to work radical changes in the Medicare and Medicaid programs. David G. Smith, in his book, Entitlement Politics: Medicare and Medicaid, 1995 - 2001, describes the process followed by Gingrich’s House:

Passage of the Medicare Preservation Act was another striking example of party discipline and organization. In a word, the Democrats had no visible effect on the legislation. Hearings were held, but only on general issues, not on legislation. The work of the task force was not made public nor shared with Democrats. Legislative drafts were given to the minority immediately before markups in the Ways and Means and Commerce Committees. No subcommittee markups were held. Medicare markups in full committee were constrained to one day. Floor debate was limited to five hours, with one hour for a Democratic substitute. The seven-hundred-page bill was passed on October 19 with only six Republicans breaking rank. At no point in the entire history of this legislation did the minority prevail on a significant amendment.

Two key features characterize the Republican's performance. First, they maintained tight discipline within their own party. In comparison the Democrats have completely failed at maintaining a unified front, delaying and weakening, if not destroying the possibility of real reform of our health care system. Second, the Republicans made no pretense of bipartisanship. By contrast, the Democrats have bent over backwards trying to accommodate Republican concerns. Senator Baucus met for months with Republican Senators attempting to achieve bipartisan support, dangerously delaying enactment of legislation. All jurisdictional committees have held lengthy markups, accepting a number of amendments offered by Republicans. All of this has been for naught. Now as then, Republicans have completely rejected the very idea of bipartisanship.

In 1995, the Republican House majority believed they had a mandate from the American people and a vision for how to improve American health care. They pushed ahead on their own time schedule with their own bill, shoving the Democratic minority aside (until President Clinton's veto stopped the juggernaut). This time the Democrats have the mandate and vision. While the comparably generous and persistent attempts of the Democrats at bipartisanship are admirable, they have not in any way been reciprocated. It is now time to move ahead, as the Republicans did in 1995 and would be doing now if they were in power. It is time to close ranks and get the job done. We need a bill on the President’s desk by Thanksgiving (with strong public plan choice).

NYT: Panel Finishes Work on Health Bill Amendments: In its grueling final hours, the committee voted Thursday to soften the impact of financial penalties that would be imposed on people who did not obtain insurance under the legislation. It also voted to modify a proposed tax on high-cost health insurance policies, so that fewer people would be affected.
WaPo: Senate Committee Stays Late to Work on Health-Care Bill:...One final piece of committee business was among the most significant: a measure that would have the effect of exempting 2 million people from the requirement to buy insurance and remove any possibility that people could face criminal penalties if they did not do so. The amendment was one of the few to garner broad bipartisan support.

From Reuters:Most Americans would pay higher taxes to fund healthcare reforms that provide the best quality of care, but only a minority expects Washington to deliver it, according to a survey released on Wednesday.

Democratic Sen. Cantwell's alternative to a public option passed the Finance Committee 12-11 with Democratic Sen. Lincoln voting with Republicans against the measure.

Cantwell said the amendment "hits the sweet spot" between public and private insurance.

“It is a public plan, but negotiated with the private sector,” she said.

The amendment gives states the power to negotiate down the price of insurance. If insurance companies agree to cover a chunk of the uninsured, states would help pay for the coverage. The states negotiate with insurers to set the cost and coverage of the program. The rates aren't tied to Medicare or Medicaid, but set at the state level, she said.

The basic health plan would cover people who are at or below 200 percent of the federal poverty line, which would include 75 percent of the nation. Chris Frates

We knew that the Senate Finance Committee would reject the public sector option. Now they have done just that.

This is not news. Nor is this a “fatal blow” for progressives.

Will the public option survive a vote on the Senate floor? Probably not—though it could happen. But this still does not mean that the public option is dead.
We know that the bill that emerges from the House will contain a MedicareE (for Everyone) alternative. The House bill and the Senate bill will then go to conference. This is the moment that matters.

As a respected HealthBeat reader who knows Washington well recently told me, “Everything else is foreplay.” Much of what we are reading now is posturing--by some politicians ( Charles Schumer deserves an Emmy), by some pundits and by unnamed sources who want reporters to think that they know more than they actually know.

I would be happier if I thought both the Senate and the House bill would include a public option. But that isn’t necessary. All that is necessary is to get a bill through the House, and a bill through the Senate, with or without MedicareE. In Conference, where the two bills are merged, they can put the public option back in.

As former Congressional staffer and HealthBeat reader Jim Jaffe points out: “Remember that the Clinton bill never came to a vote in either House, so there was no chance to duke out differences in conference. Here it appears probable that each house will pass a bill, however imperfect they may appear. I'd call that progress.” Keep in mind: once the bill goes to conference committee they won't need 60 votes in the Senate. It will be purely an up/down vote.

But isn’t Senate Finance the stronger committee? In conference won’t the Senate trump the House? Traditionally, Senate Finance has wielded great power. But in the past, it was chaired by legendary power brokers: Russell Long. Bob Dole. Lloyd Bentsen.

Max Baucus is no Lloyd Bentsen. He set out to put together a “bi-partisan bill,” and he has failed dismally. To be fair, from the beginning this was a hopeless task: the conservatives do not want reform of any kind. But Baucus should have known that.

The conservatives prefer the status quo. Many are willing to give every native-born American a piece of paper titled “insurance”—but, as I noted here, they would leave it to the insurance industry to decide what that piece of paper is worth. Its value would depend on what the customer is able and willing to pay. If the customer can’t pay roughly $13,500 (in today’s dollars) for a family plan, earns too much to qualify for a government subsidy (for example, a couple earning over $58,820) and doesn’t have an employer willing to pick up roughly 75% of the premium, he and his family will probably wind up with a high-deductible plan that they can’t afford to use. They may be able to get primary care without meeting the deductible—if they can find a primary care doctor. Bottom line: “Reform” would mean that we continue to ration care according to ability to pay.

Low-income households would be covered by subsides, but many on the third and fourth steps of a five-step income ladder would find themselves spending 12% of their income for such “coverage” as the private insurance industry decides to give them. For a family of three with joint income of $80,000, that means they could wind up paying $9,600 in premiums, plus up to $10,000 a year, out of pocket, in co-pays and deductibles.

President Obama and White House budget director Peter Orszag understand that if health insurance isn’t affordable, reform becomes a sham. The political penalty for promising what you can’t deliver would be steep. Thus they understand that for health care reform to work they must do what Massachusetts didn’t do: reduce the cost of care before rolling out full coverage.

The Commonwealth Fund estimates that administrative savings alone would make a public-sector family plan $2000 less expensive than a private-sector plan. And that’s just the beginning. Reform could save billions if some of the Medicare reforms currently under consideration are put in place over the next three years--and then incorporated in the public plan. By paying doctors and hospitals more if they collaborate to provide the effective, efficient, patient-centered care that we see at medical centers like Geisinger and Mayo —while refusing to pay for unnecessary tests, preventable readmissions, and over-priced products and services that expose patients to risk without benefit—reformers could drive premiums lower. In order to compete, many private insurers would almost certainly follow suit.

Many in the administration know what needs to be done. Medicare just needs to be begin implementing the structural changes that the Medicare Payment Advisory Commission (MedPAC) has been recommending for years—reforms that did not interest President Bush because he was engrossed in a pet project: turning Medicare over to the for-profit industry.

What will happen in Conference? Today the Wall Street Journal said it all in one sentence: “The idea could still revive if the White House weighs in strongly on its behalf.” As I have said in the past everything depends on what President Obama, Peter Orszag and Rahm Emanuel decide to do. Forget what Schumer or Snowe or even Rockefeller say today. The deal will be consummated, not on the Senate floor but in conference. Is the White House divided on this issue? Perhaps. But it is hard to see how the administration is going to deliver health care for all unless, in the end, the President insists on a public plan that, together with Medicare, will have the clout to begin eliminating the waste in our health care system.

Remember President Obama’s iron-clad campaign pledge to not to raise a dime in taxes from middle-class taxpayers making $250,000 annually or less? Well, the President did not lift a finger to stop the Senate Finance Committee Democrats from tossing his no-tax pledge out the window. Specifically, the Committee added a provision to its health reform plan that would increase the threshold for deducting medical expenses from today's level of 7.5 percent of income to 10 percent.

As Senator Orrin Hatch writes in this excellent column: “Which taxpayers would suffer this tax increase? Those earning more than $250,000 per year that President Obama pledged would be the only Americans to be saddled with a tax increase under his administration? Hardly. Of the almost 15 million families affected by this change, only 78,000 have incomes of more than $200,000. The other 99.5 percent of the victims of this tax hit would be below that figure, with many of them being far from wealthy. In fact, more than 62 percent of the taxpayers affected by this change make less than $75,000 per year.”

Moreover, this tax increase would be borne by Americans seeking relief from high medical expenses, namely the sick and the elderly. The President should keep to his no-tax promise and threaten to veto any health care reform legislation that includes a middle-class tax hike.

THE SHOW HAS MOVED ON: The Senate Finance Committee continued its work Wednesday, but it has become increasingly clear that the next stage of the process is already underway as major decisions are being postponed until after the mark-up. For example, Sen. John Kerry offered his changes to the tax on high-end plans. But instead of a vote, he said he would work on the issue as the bill moves to the floor. And the public option alternatives being crafted by Sens. Snowe and Carper are taking a similar path. Few expect to see Snowe's trigger or Carper's state-based affordability plans debated during the mark up. The committee will continue cranking through its laundry list of comparatively minor amendments and could wrap up as early as today while backroom discussions on major sticking points are just getting started. Chris Frates

Louisiana Republican Gov. Bobby Jindal urged his party Tuesday to shift to offering health care solutions instead of just rejecting what President Barack Obama and the Democratic majority in Congress are proposing. "I think now is the perfect time to pivot and to say, not only here’s what we’re against, and not only here’s how we’re going to contrast ourselves, but here’s what we’re for,” Jindal said in an interview with POLITICO.

One thing that the media coverage of the Senate Finance Committee doesn't seem to get at is the long view. First of all, that all five Senate and House committees will report out a bill is remarkable.

Second of all, the idea that everything in Senate life requires 60 or (as Sen. Ben Nelson claims) 65 votes for legitimacy is nonsense. Third, we are closer to a reform bill on health care than at any time in decades. Add to that the concept that the real bill will be forged by reconciliation between the chambers. A bill will pass. It may or may not have a public option, but it will be progress despite the Senate's reluctance. How much? Ah, that's what inquiring minds want to know. But the Senate Finance vote was as expected as it was disappointing for its timidity. The uninsured public is going to have to wait a few years as it is. The ones who live will appreciate having something eventually. The ones who don't? Well, they don't vote, do they?

(Cross posted from SMS): If Andy Rooney were covering the current healthcare debate, he might say, "Doncha hate it when people take your campaign promises seriously and expect you to take them seriously, too? Also, doncha hate it even more when people wonder why you wanted $19 billion for healthcare computerization, and yet you refuse to put your own legislation online?"

Yes, those are good questions, going right to the heart of what it is that the Democrats are tying to do with their health care bill. Are they trying to bring openness and transparency to the process, or are they trying to keep it all as secret as possible? And if they want to keep it under wraps, we might ask, "Why?"

Those questions come to mind as I read of a new poll from Rasmussen Reports, headlined, "83% Say Congress Should Post Bills Online For All To Read Before Voting On Them." Yup, an overwhelming 83 percent of Americans think that Congress should post legislation (including, of course, the healthcare bill) online well before voting on it. Indeed, a thumping 64 percent of Americans think that legislation should be online for two weeks before it gets voted on.

That full-disclosure public sentiment is certainly in keeping with the "information wants to be free" ethos of the Information Age, which started to wash over politics, in the form of C-SPAN, debuting way back in 1979. And the Internet has opened up new vistas for disclosure and transparency; Newt Gingrich is a Transparency Hero for driving the process of putting most House proceedings immediately online, via the Thomas system, which the Senate quickly picked up on. But that was 14 years ago, and little has happened since to advance the notion of "sunshine" on Capitol Hill.

Yet it seemed like just yesterday that Barack Obama pledged that all his presidential health care deliberations would be put on C-SPAN. In fact, it was barely more than a year ago--he made that pledge, most recently, on August 21, 2008. He told an audience in Chester, VA:
"I'm going to have all the negotiations around a big table. We'll have doctors and nurses and hospital administrators. Insurance companies, drug companies -- they'll get a seat at the table, they just won't be able to buy every chair. But what we will do is, we'll have the negotiations televised on C-SPAN, so that people can see who is making arguments on behalf of their constituents, and who are making arguments on behalf of the drug companies or the insurance companies. And so, that approach, I think is what is going to allow people to stay involved in this process."

That seems clear enough. But of course, it didn't happen.

And it was just last week that Sen. Jim Bunning (R-KY), offered an amendment to the Finance Committee bill calling for, among other things, a three-day period in which the legislation could be posted online. But Bunning's amendment was voted down. Over on the House side, Republicans have a similar idea, but of course, they aren't likely to get very far with the Democratic majority.

Admittedly, both parties have been guilty of trying to keep the "sausage-making" process as veiled as possible.

But with every year, the argument for secrecy attenuates, as a) better information technology makes it easier to fully disclose, and b) that same better info tech makes it virtually inevitably that the secrets will be disclosed anyway.

And secretiveness is doubly ironic for the current Democrats, since not only did their leader, Obama, promise to let everything hang out on TV, but the Obamacare forces have placed great stock on the idea that information technology will help improve health care.

Earlier this year, the "stimulus package," a.k.a. American Recovery and Reinvestment Act, allocated $19 billion for health information technology. There are plenty of good arguments on behalf of health IT (some made at a conference held on Tuesday morning at the US Chamber of Commerce, more on that soon), but one could be forgiven for thinking that the first thing that should be digitalized and "transparent-ized" would be the authorizing legislation of Obamacare. But not so fast.

No doubt the Democrats think that they are playing it smart by doing it the old-fashioned way--behind closed doors. But it's entirely possible that they are outsmarting themselves, because they are in the process of producing a product that the American don't seem to like. This morning I went to a healthcare discussion hosted by Harvard's Shorenstein Center; more soon on that as well. But suffice it to say, for now, that leading academic experts, including Kathleen Hall Jamieson and Robert Blendon were more than a little bearish about the current legislation.

Hmm. Big Democratic majorities back then, high hopes, a bill hatched the traditional way, and then... boom! it blew up when the public got wise to it. And that was before the Net, before Rush Limbaugh and Glenn Beck.

No wonder Politico front-paged a story mulling over who would succeed Harry Reid as Democratic Leader if is defeated for re-election next year.

The U.S. Chamber of Commerce sent out an alert this afternoon to its national trade associations and chambers of commerce to oppose Sen. Wyden's amendment that requires employers with more than 100 employees to offer workers a choice of two plans or provide a voucher so employees can buy insurance in the exchange.

A health reform bill must emerge from the Finance Committee, if only to move the process along. The Finance Committee, because of its jurisdiction, has to work through issues related to Medicare and Medicaid, but it really doesn’t have to address anything else. How to proceed?

A public option could be designed in many ways and added to the bill on the Senate floor as a last item. During that floor debate, it will be clear if any Republican support exists for any scenario — with or without a public plan. Likewise, Senate leaders can assess how many Democrats are on board with the core bill, again with or without a public plan. The Finance Committee has to approve something, but no one should panic if it doesn’t include the public option. There are other ways to get there. In the end, if Congress hopes to achieve meaningful cost savings and guarantee real insurance reform, it will need a public plan.

Hewitt Associates: Despite economic instability and increased employer pressure to cut costs, health care rate increases are projected to remain stable for the third consecutive year, according to an analysis by Hewitt Associates, a global human resources consulting and outsourcing company. In 2009, average health care premiums increased 6.0 percent, consistent with 2008. Hewitt also projects a 6.0 percent average premium increase for employers in 2010.

According to Hewitt, the average total health care premium per employee for large companies will increase from $8,607 in 2009 to $9,120 in 2010. The amount employees will be asked to contribute toward this cost is $2,085, or 23 percent of the total health care premium. This is up 10 percent from 2009, when employees contributed $1,890, or 22 percent of the total health care premium. Average employee out-of-pocket costs, such as copayments, coinsurance and deductibles, are expected to increase to $1,938 in 2010, also up 10 percent from $1,766 in 2009.

The Senate Finance Committee decisions rejecting a public option on health care shows the votes are not there on that part of the legislation.

With three Democrats voting against a public option, the passage of health care reform comes down to whether House liberals are willing to accept a Senate bill without a public option. Even though they don’t like it, my guess is they remain committed to health care reform. They realize if this Congress doesn’t pass health care reform, it will be another 20 years before another president seeks comprehensive reform.

The public option obviously had a bad day yesterday, but no one thought a public option would be included in the Finance Committee bill, and the vote alignment was not a big surprise. The real test will be whether the House bill will contain public plan choice, because if it does (and I think it will) then there is a decent chance that some form of public plan will make it out of conference.

At that point the Democrats who voted against it yesterday will have to decide whether they want to side with their party, their president, and the public, or with the Republicans and the insurance industry. I hope that they will swallow hard and do the right thing at that point.

Public opinion polls continue to show that public plan choice is one of the most popular features of health care reform. Recent polls show that it is supported by 65% (NYT, Sept. 25), 55% (WaPo, Sept 12), and 59% (KFF, Sept) of the American public. The CBO scores a strong public plan as saving $110 billion over 10 years. http://voices.washingtonpost.com/ezra-klein/2009/09/cbo_a_strong_public_plan_saves.html If Congress is serious about cost-savings, the public plan is a no-brainer.

The cooperative alternative is silly http://www.npr.org/blogs/money/2009/09/podcast_a_closer_look_at_healt.html, and has no support outside the Finance Committee. Senator Carper is reportedly floating a compromise that would allow the states to set up their own alternative plans, but they can do that now if they choose to do so, and they aren’t rushing to seize this opportunity. Indeed, the last thing the states need right now, as many of them are battling bankruptcy, is more financial obligations. Moreover, we have a national problem that needs a national solution. Finally, there is the trigger alternative, which may have a chance in the Finance Committee. In principle, a national trigger tied to some reasonable measure of insurance industry performance for which we have close to real time data might be a useful compromise. But Senator Snowe’s proposal of a state-by-state trigger gets us back again into balkanized and unworkable state-by-state reform.

Those of us who believe that Americans deserve real choice in purchasing health insurance, that insurers should have to face real competition, and that saving money in health care is possible and vitally important to the future of our country lost a battle yesterday, but we have not yet lost the war.

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